Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on sustained buying by foreign funds and retail investors amid a firming trend at other Asian markets and hopes of further push to economic reforms by the government after the recent Cabinet expansion. Some support also came in from international ratings agency Moody’s quarterly Global Macro Outlook report that it expects India to witness 'sustained robust growth' over the next two years. However, some investors are cautious ahead of key macroeconomic data during the week ahead. The government will issue consumer and wholesale price inflation data for October on November 12 and November 14, respectively.

At present, Sensex and Nifty were trading above the crucial 27,950 and 8,350 levels respectively, with gains of over 0.35%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over half a percentage point. There is no sign of profit booking from any corner and the gains are visible across the board.  On the sectoral front, stocks from Realty, Capital Goods and Infrastructure counters were supporting the markets’ uptrend, while those from information technology (IT) and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of Redington (India) have surged after Reliance Mutual Fund bought nearly 4 percent stake in the company for about Rs 160 crore through open market. On the other hand, shares of TV Today Network have declined after reporting a single digit 2.88% year on year growth in standalone net profit at Rs 13.20 crore for the quarter ended September 30, 2014, due to higher product cost and other expenditure.

On global front, most of Asian markets were trading higher after the release of strong US jobs figures and weekend data showing China's exports remained on an upward trend. Back home, Indian rupee weakened by 10 paise to 61.60 against the dollar in early trade due to increased demand for the US currency from importers and banks. The market breadth on BSE was positive, out of 2306 stocks traded, 1433 stocks advanced, while 786 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27984.30 up by 109.57 points or 0.39% after trading in a range of 27994.76 and 27909.62. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index gained 0.55%.

The gaining sectoral indices on the BSE were Realty up by 1.06%, Capital Goods up by 0.81%, Infrastructure up by 0.73%, Bankex up by 0.73% and Auto up by 0.63%, while IT down by 0.09%, TECK down by 0.02% and FMCG down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.98%, Hindalco up by 1.61%, GAIL India up by 1.46%, HDFC Bank up by 1.14% and Axis Bank up by 1.13%. On the flip side, BHEL down by 1.81%, Bharti Airtel down by 0.86%, Dr. Reddys Lab down by 0.83%, Infosys down by 0.79% and Coal India down by 0.50% were the top losers.

Meanwhile, Optimistic over the improving macro-economic indicators of the country, new Minister of State for Finance Jayant Sinha has stated that India will cross 6 percent GDP growth in 2015-16. Jayant Sinha further added that domestic economy has entered into accelerating trajectory and will return to 7-8 percent sustainable growth path in the coming years.

After registering an average growth rate of 8% during FY08-FY12, Indian economic growth had slowed down to below 5% over the last two financial years. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the economy has shown signs of nascent recovery and expanded at its fastest pace in more than two years by 5.7% during Q1FY15 as compared to 4.7% growth recorded in same quarter last year.

New Minister also expressed confidence that the government will be able to push the Constitutional amendment bill on Goods and Services Tax (GST) and Insurance Bill during the winter session of Parliament beginning November 24. By adding further, he said that controlling inflation and creating job are the top priorities of the government.  On fiscal deficit, Jayant Sinha added that the recently taken measures to control expenditure and declining crude oil prices will help to check fiscal deficit. India’s fiscal deficit widened to 82.6% to cross Rs. 4.38 lakh crore during April-September this fiscal as against Rs.5.31 trillion Budget Estimates for 2014-15. The government has targeted to check the fiscal deficit at 4.1% of gross domestic product (GDP) in FY15. The fiscal deficit was recorded at around Rs 5.08 lakh crore or 4.5% of GDP in FY14 as against 4.9 % in FY13.

The CNX Nifty is currently trading at 8,377.80 up by 33.55 points or 0.40% after trading in a range of 8,377.90 and 8,353.15. There were 35 stocks advancing against 15 declining on the index.

The top gainers on Nifty were IDFC up by 2.68%, Ultratech Cement up by 2.40%, Tata Steel up by 1.86%, Hindalco up by 1.71% and Jindal Steel & Power up by 1.44%. On the flip side, NMDC down by 2.04%, BHEL down by 1.77%, Bharti Airtel down by 1.09%, Dr. Reddys Lab down by 0.89% and Infosys down by 0.74% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.21%, Shanghai Composite surged 1.31%, Jakarta Composite strengthened 1.30%, Hang Seng increased 0.55% and Nikkei 225 was up by 2.08%. On the flip side, Taiwan Weighted slipped 0.10%, FTSE Bursa Malaysia KLCI decreased 0.14% and Straits Times was down by 0.02%.